Russia turns to Switzerland for cheese

With the Russian government’s EU wide ban on certain food products now taking hold Switzerland looks most likely to benefit on the dairy side, according to Bloomberg.

Since August 7, when Vladimir Putin’s government banned many food imports from nations supporting sanctions due to the country’s role in the Ukraine crisis, Daniel Daetwyler of Swiss dairy trading company Intercheese AG says at least 14 Russian importers have contacted Intercheese, Bloomberg reports.

It says the reason for the surge in business is that Switzerland hasn’t joined the European Union, the US, Canada, Australia and Norway in penalising Russia.

“Russian importers are looking for the cheeses they can’t get from the Europeans anymore — Mozzarella, Gouda and Edam,” said Jacques Bourgeois, Director of the Swiss Farmer’s Union has said that if the embargo remains, it’s possible we’ll export more cheese to Russia.

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“But Switzerland is a small country, we can’t just double production from one day to another. If there’s more demand, of course we’ll have to see that we can deliver. We’ll be pleased about every additional kilo we can export.”

Russia is a key export destination for EU cheese and butter, taking in around 27% and 19% respectively of the total volume of EU exports in 2013.

According to DairyCo, in the short term, the loss of this export market will create a significant increase in available stocks, which will put some pressure on the market. It says unless Russian consumer purchasing patterns change significantly, the supply gap created by the ban should be filled by other exporting countries, creating market opportunities elsewhere.

Although the EU is also an important supplier of SMP to Russia, it does not represent one of its key export destinations, and the price impact on this segment of the market is not expected to be as significant.